LANSING, Mich. (AP) — Legislation to reduce Michigan’s high auto insurance premiums by letting drivers opt out of mandatory unlimited medical coverage is in peril, with majority Republicans lacking enough support to pass it on their own and many Democrats pushing an alternative plan.
House Speaker Tom Leonard openly says he needs 10 to 15 of the chamber’s 45 Democrats to help move the bill to the Senate. That means 19 to 24 of the 63 House Republicans are opposed.
He is relying on Detroit Mayor Mike Duggan, whose city residents face the highest rates in the U.S. and who is a leading proponent of the plan, to bring Democrats on board this fall. Some are open, but many remain resistant weeks after the measure was introduced, which suggests the proposal could stall like many before it have.
The legislation seeks a 40 percent cut, for five years, in personal injury protection fees for motorists choosing $250,000 rather than unlimited PIP coverage. That could equal an estimated 20 percent reduction in the overall cost of a comprehensive policy and a nearly 50 percent discount on a basic policy.
Drivers age 62 and older who have Medicare or other retiree health insurance — whom the bill’s supporters say should not be double billed for injury coverage — could opt out entirely of PIP, saving an estimated 35 percent. There also is a provision stating that pricing for $250,000 and $500,000 coverage levels must “reflect savings expected” from the bill.
Michigan is the only state to require unlimited lifetime coverage for medical expenses resulting from auto crashes. A $170 annual per-vehicle fee is assessed to reimburse auto insurers for expenses surpassing $550,000.
Rep. Sherry Day-Dagnogo, a Detroit Democrat who opposes the legislation, said she is concerned insurance companies could “wiggle out” of requirements to lower rates and that the discounted rates would not last. She also worries Detroiters who pick less injury coverage and who are seriously hurt would be put in a “vulnerable state” after leaving the hospital. Day-Dagnono is backing alternative measures that would, among other things, prevent the use of non-driving factors to set rates — a practice that critics say unfairly discriminates against lower-income motorists.
The $250,000 PIP option would include $225,000 for emergency care and $25,000 for other care and benefits such as wage loss replacement, which detractors say is inadequate. Backers counter that any medical costs exceeding the caps would then be covered by people’s private or government health insurance.